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lukeprog comments on Reply to Holden on The Singularity Institute - Less Wrong
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Regarding the theft:
I was telling my friend (who recently got into HPMOR and lurks a little on LW) about Holden's critique, specifically with regard to the theft. He's an accounting and finance major, and was a bit taken aback. His immediate response was to ask if SI had an outside accountant audit their statements. We searched around and it doesn't look like to us that you do. He immediately said that he would never donate to an organization that did not have an accountant audit their statements, and knowing how much I follow LW, immediately advised me to not to either. This seems like a really good step for addressing the transparency issues here, and now that he mentions it, seems a very prudent and obvious thing for any nonprofit to do.
Edit 2: Luke asked me to clarify, I am not necessarily endorsing not donating to SI because of this, unless this problem is a concern of yours. My intent was only to suggest ways SI can improve and may be turning away potential donors.
Edit: He just mentioned to me that the big four accounting firms often do pro bono work because it can be a tax write-off. This may be worth investigating.
Also note that thefts of this size are not as rare as they appear, because many non-profits simply don't report them. I have inside knowledge about very few charities, but even I know one charity that suffered a larger theft than SI did, and they simply didn't tell anybody. They knew that donors would punish them for the theft and not at all reward them for reporting it. Unfortunately, this is probably true for SI, too, which did report the theft.
Yep. We knew that would happen at the time - it was explicitly discussed in the Board meeting - and we went ahead and reported it anyway, partly because we didn't want to have exposable secrets, partly because we felt honesty was due our donors, and partially because I'd looked up embezzlement-related stuff online and had found that a typical nonprofit-targeting embezzler goes through many nonprofits before being reported and prosecuted by a nonprofit "heroic" enough, if you'll pardon the expression, to take the embarrassment-hit in order to stop the embezzler.
I suspect that some of the hit was due to partial disclosure. Outsiders were left guessing what exactly had transpired and why, and what specific steps were taken to address the issue. Maybe you had to do it this way for legal reasons, but this was never spelled out explicitly.
Pretty sure it was spelled out explicitly.